We immediately checked from xyz.com Exchange Online mailboxes if free busy of abc.com Exchange Online mailboxes were visible. Well, they were not. That is the expected behavior. Or is it? Does organizational relationship always require setting up at both tenants? This is my first question.
This phenomenon caused by wrong configuration in "TargetApplicationUri" and "TargetAutodiscoverEpr". After creating relationship between tenant, you need double check value for those two attributes. Then your tenant free/busy will be shared to target tenant.
PS: abc.com and xyz.com are a single on-prem multi-tenant hybrid.
If so, I would suggest you try to create a organization relationship with Exchange online default domain name.
Then check with mailbox which use the default domain name, whether free/busy shared as expected. I guess this phenomenon caused by shared domain name in hybrid.
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